Battle for compensation rages four years after BP’s US oil spill

Having paid just 20 failed business claims out of 3,000, the oil giant has challenged
the settlement it signed to avoid individual lawsuits

By Jemima Kelly / Reuters

Illustration: Yu-sha

Four years after the Deepwater Horizon blowout and spill, oil is still washing up on the long sandy beaches of Grand Isle, Louisiana, and some islanders are fed up with hearing from BP that the crisis is over.

Jules Melancon, the last remaining oyster fisherman on an island dotted with colorful houses on stilts, says he has not found a single oyster alive in his leases in the area since the leak and relies on an onshore oyster nursery to make a living.

He and others in the southern US state say compensation has been paid unevenly and lawyers have taken big cuts.

The British oil titan has paid out billions of US dollars in compensation under a settlement experts say is unprecedented in its breadth.

Some claimants are satisfied, but others are irate that BP is now challenging aspects of the settlement. Its portrayal of the aftermath of the well blowout and explosion of its drilling rig has also caused anger.

“They got an advert on TV saying they fixed the Gulf, but I’ve never been fixed,” said Melancon, who was compensated by BP, but deems the sum inadequate.

The oil company has spent over US$26 billion on cleaning up, fines and compensation for the disaster, which killed 11 people on the rig and spilled millions of barrels of oil into the Gulf of Mexico for 87 days after the blast on April 20, 2010.

That is more than a third of BP’s total revenues for last year and the company has allowed for the bill to almost double while fighting to overturn and delay payments of claims it says have no validity — made after it relinquished control over who got paid in a settlement with plaintiff lawyers in March 2012.

The advertisement that most riled Dean Blanchard, who began what later became the biggest shrimp company in the US in 1982, was the one first aired by BP on US television in late 2011 that said “all beaches and waters are open,” and can be seen on BP’s YouTube channel.

At that time almost 130 square kilometers of water in Louisiana were closed to fishing, the state’s Department of Wildlife and Fisheries said. Seven fishing areas are still closed, including three where Blanchard says he would usually get his seafood.

Asked about the discrepancy, BP, which made the cleanup advertisements to help the affected states bring visitors back, said there was no scientific basis for the water closures and that all studies had found that seafood was safe to consume.

PERCEIVED INJUSTICE

Perceived injustice, between those who got payouts and those who did not, has divided the small community on Grand Isle, 80 km south of New Orleans. Within sight of a line of deep-sea oil rigs, it was one of the worst affected areas.

Long streaks of oil marked the sand where a couple of tourists walked barefoot, and small tarballs, which environmentalists say contain the most toxic form of oil, had collected on part of the beach when reporters visited in October last year to report on the legacy of the spill.

The Gulf Restoration Network, an environmental group, says spilled BP oil is still appearing in Grand Isle. The group saw what it called “thousands of tarballs” there on April 9 and collected some of them for testing.

A BP spokesman said only very small quantities of material from the Macondo well were washing up and they did not threaten human health.

Under the settlement, claims for lost income or property damage have been easier for individuals and large businesses than small companies or startups without detailed accounts.